The SA Reserve Bank has seized nearly R100m belonging to alleged “gold mafia” Rappa Resources after the company flouted SA’s exchange control regulations, adding further woes to the firm, which has increasingly become unbankable in the country.
The Bank seized R94.5m of the group’s money held with Access Bank SA, with the cash forfeited to the state. The seizure comes as domestic lenders shut out the group over reputational risk concerns. Business Day reported in June that Capitec, which has set its sights on growing its business banking division, stopped Rappa Resources from moving foreign currency using its facilities after media reports flagged the group’s dodgy business dealings.
Rappa processes mining residues and waste material to extract precious metals, primarily gold and silver. It then exports gold-bearing bars. It is, along with other entities, accused of shortchanging the fiscus by billions of rand by introducing untaxed gold into the supply chain and faking VAT payments for this bullion.
The Johannesburg-based Rappa in May last year opened a business account with Capitec Business. However, the relationship was short-lived as Capitec two months later informed Rappa that it was conducting a review of its business and transactional activities.
The Stellenbosch-based lender said pending the finalisation of its review, the bank would not process any further foreign currency transactions on behalf of Rappa.
“Rappa had featured in various adverse media reports. Capitec does not express a view on the veracity of such reports but merely records that this is available in the public domain and that Capitec is therefore entitled to consider these in its risk reviews,” the bank wrote to Rappa.
“Capitec, after careful consideration of, among others, the business activity of Rappa, including its nature and purpose of business activity, ownership and control structure, source of funds, transactional activity value chain, etc, concluded that a continued banker-client relationship with Rappa is outside its risk appetite.”
Business Day reported in March 2024 that the SA Revenue Service (Sars) obtained a court order compelling Rappa to hand over documents it needed to prove a tax liability of more than R4bn in a matter implicating several industry players.
The documents include its “know your client” documentation of its suppliers from January 2019 to June 2020 and its bank statements for the 2018 financial year. Sars will have in its possession Rappa’s records containing declarations made to the SA Diamond and Precious Metals Regulator on the breakdown of goods bought from suppliers from January 2019 to March 2020.
The gold refinery firm suffered a further blow in March when Bidvest Bank joined Capitec and told Rappa that it would shut down several of the accounts the company held with it.
“The bank has assessed the conduct on your accounts and determined that the transactional behaviour on the accounts is outside its risk appetite,” Bidvest wrote to Rappa.
Rappa then tried to move its facilities to Bank Zero, which also declined the group’s request to bank with it after its processes flagged the group.
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